Toronto City Council approves new 15 per cent small business property tax reduction

The new small business property tax subclass will come into effect for the 2022 tax year. It is estimated that property tax reductions will apply to approximately 25,000 small businesses across Toronto, or 60 per cent of all commercial properties.

Businesses will be eligible if they meet either of the following criteria:

1. Businesses located downtown, on the central waterfront, in designated growth centres or avenues in the City of Toronto’s Official Plan
   – Properties must be classified within the commercial or new commercial tax class (with certain property types excluded)
   – Properties must have a Current Value Assessment (CVA) of less than or equal to $7 million
   – Lot size must be 7,500 square feet or less, or for commercial condos a gross floor area of 2,500 square feet or less
2. Businesses located anywhere else in the city
   – Properties must be classified within the commercial or new commercial tax class (with certain property types excluded)
   – Properties must have a CVA of less than or equal to $1 million

For example, a small business located in the city’s downtown or on an avenue in Scarborough with property assessed at $3 million and meeting the lot size limit would see a tax reduction of more than $8,500, while a small neighbourhood restaurant business in North York in a non-retail location with a property value of $1 million would see a reduction of more than $1,800 in annual property taxes.

Small business property owners do not need to apply for this tax relief, as all commercial properties will be assessed for eligibility. A request for reconsideration or appeal process will be available for property owners who feel that their property should be included in the new tax subclass.

The provincial government is expected to match the municipal tax rate reduction with a corresponding reduction in the business education tax for all eligible small business property owners.